Right now pretty much the only option is to develop in the desktop IDE, then port that to the server. Look at the Techniques for Developing for Server thread a bit further down to see what I am doing, and some of the issue I run into.

I agree that an IDE for developing (and debugging) scripts running against the server engine would be great.

I use the great framework revigniter to develop and deploy livecode applications. This framework is developed and maintained by Ralf Bitter. In addition, Ralf offers a TextMate bundle for livecode http://revigniter.com/accessory. I personally use sublimetext editor (http://www.sublimetext.com) in which you can import these TextMate files. More over you can configure sublimetext also as ftp client.

The flexibility of LiveCode Server offers many different ways of working, and FWIW I've found it helpful in my own projects to include relatively little code in the pages themselves, usually limited to function calls for routines defined in a library stack, e.g.: